Alterra Capital Partners, a private equity firm founded in 2020 by former Carlyle Group employees, is making waves in the investment world with its ambitious $500 million fund earmarked for Africa’s burgeoning sectors. The firm recently celebrated the successful first close of its fund, having secured an impressive $140 million in initial capital. This landmark achievement reflects growing investor confidence in the untapped potential of the African market.
The Alterra Capital Partners fund is poised to focus on critical sectors within the African economy, including telecommunications, technology, logistics, healthcare, consumer goods, and retail. Notable figures such as Aliko Dangote, David Rubenstein, and Bill Conway are among the prominent investors who have thrown their weight behind this venture.
But the support doesn’t end there. The fund has also attracted substantial investments from a diverse range of institutions, including Norfund AS, Standard Bank Group Ltd., International Finance Corp., Germany’s Deutsche Investitions- und Entwicklungsgesellschaft GmbH, and Allianz SE’s AfricaGrow fund. This broad investor base demonstrates the global interest in the African investment landscape.
Alterra Capital Partners’ founders, Genevieve Sangudi, Eric Kump, Idris Mohammed, and Bruce Steen, bring extensive experience from their time at Carlyle Group, a renowned player in private equity. Carlyle Group had previously raised a $700 million fund dedicated to Africa in 2014, although it discontinued its African operations in 2020.
Despite Carlyle Group’s exit from the African market, Alterra Capital Partners found a unique niche by acting as sub-advisors for Carlyle’s Africa fund. Some of their notable investments included a substantial $147 million injection into Diamond Bank and J&J Transport.
Genevieve Sangudi, one of the founders of Alterra Capital Partners, commented on the favourable investment climate in Africa, stating, “This is an excellent time to put money to work in Africa, as many of the current macro themes provide attractive potential investment opportunities.” She highlighted the opportunities presented by the continent’s power challenges, emphasising the potential for private distributed power solutions. Additionally, Sangudi noted that technology is propelling Africa’s digital transformation at an astonishing pace, making it a prime arena for investment.
Alterra Capital Partners has already delivered impressive results for its investors, returning $600 million while successfully exiting six companies and injecting approximately $1 billion into 23 companies. In an environment where many large private equity firms have either reduced their African investments or exited the continent altogether, Carlyle is adapting its strategy to navigate the unique business landscape.
One notable adjustment in their approach is a commitment to invest 50% of their funds in companies that primarily generate revenue in dollars. This strategy is aimed at mitigating the impact of currency depreciation in the African market, showcasing Carlyle’s dedication to ensuring the success of its investments on the continent.
In summary, Alterra Capital Partners’ recent fundraising success and its impressive lineup of investors, including Aliko Dangote, reflect the growing optimism surrounding Africa’s investment potential. With a focus on key sectors and experienced leadership, the firm is poised to play a significant role in shaping Africa’s economic landscape in the coming years. Carlyle Group’s adaptation to the unique challenges of the African market underscores the importance of strategic flexibility in the world of private equity. Africa’s allure as an investment destination continues to grow, and Alterra Capital Partners is positioning itself at the forefront of this exciting opportunity.